The mini-Budget 2022 announced the government will be working with 38 areas across the country to introduce Investment Zones. Similar zones may be introduced in Scotland, Wales and Northern Ireland but this is yet to be confirmed. The incentives are still under consideration so this is not something we need to act on just yet – something to definitely be mindful of though, especially where your business might be considering expanding or relocating into an area under one of the 38 local authorities being consulted with!
Investment Zones will be designated physical areas and businesses located within them will benefit from tax incentives and planning liberalisation. The measures are part of the government’s “levelling up” and economic growth plans. Incentives ‘under consideration’ for a time-limited period of 10 years include:
- Enhanced capital allowance – 100% first year allowance for companies’ qualifying expenditure on plant and machinery assets for use within the zone.
- Enhanced structures and buildings allowance – accelerated relief to allow businesses to reduce their taxable profits by 20% per year of the cost of qualifying non-residential property costs, relieving 100% of their cost of investment over five years.
- Business rates – 100% relief from business rates on newly occupied business premises, and for certain existing businesses where they expand in English investment zone tax sites. Councils hosting investment zones will receive 100% of the business rates growth in designated sites above an agreed baseline for 25 years.
- Employer National Insurance Contributions (NICs) relief – zero-rate employer NICs on salaries of any new employee working in the zone for at least 60% of their time, on earnings up to £50,270 per year, with employer NICs being charged at the usual rate above this level.
- Stamp Duty Land Tax (SDLT) – a full SDLT relief for land and buildings bought for use or development for commercial purposes, and for purchases of land or buildings for new residential development.
Watch this space!